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Success Story
Score Guides Small Companies to Viability'They made me realize I could start a business,' says Paul Gaydosh.Score, the Service Corps of Retired Executives at Youngstown State University, can't make a silk purse out of a sow's ear. But its 35 members can, and do, help small-business owners transform raw silk into silk purses.From 9 to 11 a.m. weekdays in four rooms on a corner of the third floor of Williamson Hall, retired business people -- panels of four or five from the membership of 29 men and six women -- listen to small-businessmen and women, and those who aspire to be business owners, relate their visions and outline the obstacles they confront. Then Score advisers, with backgrounds in finance, marketing, retail and engineering, dissect their problems, often proposing several solutions, leaving it to the judgment of those advised which route to take. Score's 11,000 members celebrated the organization's 40th birthday last month and the YSU chapter, just a year younger, heard Score's national chief executive officer, W. Kenneth Yancey Jr., deliver the keynote address at a dinner. Terry Deiderick, in 1965 a young marketing instructor at YSU, has been with Score since its birth. Now a retired chairman of YSU's marketing department and an active member of Score, Deiderick was recognized for his many contributions.Where the Youngstown chapter of Score differs from most of the other 388 across the country, says former president Charles Whitman, is the local chapter's team approach. Most Score chapters choose one retired executive to advise one-on-one.The Business Journal visited four businesses that illustrate Score's role.P.G. Home ServicesWhen he was a student at Warren G. Harding High School, Paul Gaydosh Jr., today 27, accompanied his grandfather,Joe Gerchak, and learned how to make home repairs. Gerchak is a retired electrician who worked at Republic Steel Corp., later LTV Corp. "I learned electrical work," Gaydosh begins. "Actually, I learned all my work from him" -- plumbing and carpentry as well as electricity.Upon graduating from Harding in 1995, because work was scarce, Gaydosh worked on repairing his own house as he earned a paycheck in a consumer electronics store. Later he worked as a repairman for apartment complexes where there was no shortage of daily work. While he liked the security of a steady paycheck and the appreciation of his talents, Gaydosh says, "I wanted the feeling of being responsible for myself."Four years ago he approached the U.S. Small Business Administration, which is where he learned about Score. Score put him in touch with Fred Wittow, recently retired from Custom Home Service Inc., which he sold after 35 years in business."He came down on a Wednesday," Wittow recalls, and met with him, Warren Jensen, Sidney Berkowitz, Dick Redman, Bill Doliber and Chuck Creager. "We explained marketing and finances," he continues."We met at YSU for 45 minutes," Gaydosh says. "They asked what I planned on doing, the basic questions about if I had a business plan and financing. They laid it all out."While Gaydosh was prepared, "I discovered there were some things beyond my reach. They made me realize I could start a business," albeit not right away.That was the first of five visits and P.G. Home Services, Warren, was born 2 1/2 years ago. It remains housed in the garage next to the house of Gaydosh's fiancé. "If it wasn't for Score," Gaydosh says, "I wouldn't have grown my side work into my business." Of his five visits, Gaydosh says, "They make it as useful as possible. There's no dilly-dallying around. They're there for you." With Gaydosh's limited budget, Wittow remembers, "I told him how important it is to keep his customers, to do his best work, because they're the ones who will make referrals. He couldn't afford to advertise. You sell yourself by doing your best work."While a storefront would have been nice, it wasn't essential, and the cost of insurance strained PG Home Services' resources. Hence Gaydosh continues to work out of his fiancee's garage, and a cell phone gives him real-time access to customers and potential customers.Wittow continues to call Gaydosh from time to time for updates and to see how Score might be of help."Eventually I want to become larger, hire people," Gaydosh says, "and I know they'll help me."Gaydosh is the kind of client Score likes to work with, Wittow says. "We see three kinds of clients: the naive, those already in business, and the fantastic," that is, those whose reach far exceeds their grasp. "Our success rate is low," he concedes. "We do all we can but it's up to them. Our satisfaction is to hopefully see them use something we told them and turn things around."Dar Lanes"A really nice gentleman" from Score acted as midwife and guardian angel to Dar Lanes in its infancy. The Austintown store sells gift baskets and fine wines in the Westgate Plaza.The business was born in 1988, and Darlene Kromer regrets she can't remember the name of that "really nice gentleman." Without him, she says, her business would have had a much harder time getting established because he ran interference in providing information on financing and where to buy store fixtures at a reasonable price."He didn't sugarcoat it for us. He gave it to us straight," Kromer says as she relates how she and her good friend and former partner, Elaine Krakar, "went to the little office in Williamson Hall."(When Krakar decided to retire a couple of years ago, Kromer bought her out. "I hated to see her move to Florida," Kromer says. Elaine's husband, Tom, had taught Kromer at YSU and encouraged her to get her fine arts degree.)The business began on a whim. For Christmas 1987, the Krakars received a gift basket. "Elaine said, 'Wouldn't this be fun to do?' So we kicked around the idea for a couple of months. We found there was just one gift-basket store in the area," Kromer recalls. "We really had no idea how to get started."She saw an ad for Score in a newspaper. "We were second-guessing ourselves enough, so we went to see them."Kromer's business experience consisted of keeping the books for her father, a contractor, when she was at YSU studying fine arts. Krakar had been "a secretary for years, did all the bookkeeping, paid all the bills, did all the purchasing," Kromer relates. So business was not entirely foreign to them.With her background in fine arts, Kromer proposed to design and paint the baskets and arrange the flowers while Krakar would focus on managing their venture. The gentleman from Score "answered all our questions," Kromer says. He told us "no store is devoted just to gift baskets," which prompted them to offer wines as well."We had so many questions, about financing, about fixtures. Remember, there was no Internet back then, where you could go to look things up quickly.
He told us about the need for stick-to-it-iveness, to expect losses for the first two years, that we would have to work hard."The gentleman "told us where he liked to bank, where we could get fixtures [inexpensively], advised us on reasonable rent, that we had to have insurance, pay for utilities, get a food vendor's license, liquor license, needed to accept credit cards."The most valuable lesson, though, was this insight, Kromer says. "It's not how much you sell it for. It's what you pay for it [inventory]." Translation: they would need storage space to take advantage of discounts when they were offered.He nixed their thought that they should work out of their homes. " 'This is retail,' he told us," Kromer says. " 'People can't go shopping in your home.' "They opened in Cornersburg in March 1988 and found almost immediately they lacked the space they needed. That running a gift-basket shop "is so inventory-heavy" hit them hard.They had written a business plan that a bank accepted and had devoted much of their own savings to buy inventory. But what they failed to realize at the time, Kromer says ruefully, was the bank lent funds based more on their husbands' incomes than their plan and willingness to use their savings.Today Dar Lanes gives every indication of being a successful venture. The store is clean and well-lit, and the shelves are fully stocked. Kromer has three employees besides herself although she still puts in 60-hour weeks.Transladder Corp.The day after Christmas 1999, Gary Klingensmith, the owner of a trucking firm, slipped and fell from a flatbed trailer, breaking a knee and shattering an ankle. That prompted his brother-in-law, Jim Hawley, to work on designing, building and producing a ladder that would greatly lessen the likelihood of such accidents.Hawley, president of Transladder Corp. and Hawley Diversified, a small fabricator in West Middlesex, Pa., knows his way around a shop floor and trucks. Hawley Diversified installs tilt beds for wrecker trucks. "We do all the hydraulics," he says.But Hawley was not as familiar with how banks lend money or patent law. As he developed prototypes of the ladders that would make it safer to load and unload flatbed trailers -- he's on his third -- Hawley knew he needed to learn more about business.He went on the Internet, he relates, and approached PennNorthwest Development Corp. in Mercer before being directed to the Score chapter at YSU. That was 3 1/2 years ago. "The first meeting cleared my head," Hawley recalls. From the five people at the table, "I learned the mental attitude I needed to go after [the ladder] and take chances," he continues. "I learned I needed a business plan and to get legal advice."Hawley didn't return to Score until two years ago. The meetings with other panels helped him refine and focus both his concept and business plan.A different panel is present each weekday, Whitman says."I saw every one of the teams," Hawley says. "A former executive from Ford [Motor Co.] told me, 'It seems like you have a good product. What are you waiting for?' "He had started Hawley Diversified "with a red tool box, a line of credit from a bank [supplemented by] a loan from family and friends to buy the materials needed." He also "brought in another gentleman, Dan Zoliner," to look after the management of the company.From Score, Ralph Peterson, the retired president of a bank in Colorado, proved invaluable in teaching him about what banks look for. "When I was ready to go after financing, he took me through my business plan," Hawley says. "I was scared to death to write a business plan. But I did it and I'm proud of it." Also helpful was Len Gancher, who helped him break it down piece by piece. "It took me four months and a lot of research," Hawley says.Score also reviewed the various marketing approaches he could take. His market, as he saw it and Score confirmed, is western Pennsylvania, eastern Ohio and the West Virginia panhandle where huge quantities of steel are hauled.Speaking about the ladder, he says, "I made a lot of mistakes, wasted a lot of money." Much of his effort, he admits, was trial and error. He taught himself CAD, computer-assisted design, "to get going in the right direction."From the start, however, Hawley "had an idea on what should be in the business plan. [Score] reinforced my marketing ideas. The insights were there but they knew what worked from their experience. They were very, very helpful." Hawley singles out Deiderick for his marketing expertise.The ladder Hawley invented has a patent pending and he continues to work on getting his costs of production down. While he expects to sell it at the higher introductory price he's computed, he believes he needs to reduce that price by 25% so sales will take off. Youngstown Sports Grille Ralph Peters was Sean Pregibon's finance guru and Deiderick his marketing guru as well as Hawley's.Pregibon, owner of the Youngstown Sports Grille in the Boardman Plaza, opened his theme restaurant/bar just over two years ago with six employees, including himself and his father. Today the grille has 26 employees as it becomes more profitable. What hasn't changed are the long hours Pregibon, age 31, puts in.Pregibon was not the least bashful about using Score's resources after he learned about it in a newspaper. And's he's not the least chagrinned to admit that as a YSU graduate who majored in accounting, he was entirely unaware of Score's existence in the building where many of his classes were scheduled.He had 12 meetings with the panels, Pregibon says. "I was there every Friday morning at 9 o'clock. And I'd take the 10 o'clock slot too if that person didn't show.
Their role was to take what you've got and cut out the generalities, to focus in on the key concepts -- home in on those," he says."They tested me. They asked, 'What do you know about the restaurant business? What profit margin do you expect? What about the profit margin on liquor?' They saw the mistakes others had made and saved me from making them. I've tried hard to make sure I don't let them down."With his background in business, Pregibon knew he needed a solid business plan. "I gave them a 15-page plan [at an early meeting] and left [weeks later] with a 96-page plan that had a whole lot of detail and structure. At first I wasn't sure about real estate, equipment how much I could do on my own? How much help did I need? Who did I get it from? They worked with me until they felt comfortable with me being bulletproof."Restaurants have a notoriously high failure rate, as most bankers will attest. So Pregibon pondered whether to turn to a bank or seek investors. Peters helped him "shop my business plan to banks. I set up eight interviews, made my case, left my business plans with them."Peters prepared him for rejection but it still hurt when the bankers called back to say they wouldn't lend him the funds he sought. "They didn't ask for more information. They just turned me down," he recalls. Finally a bank decided it could work with him.Today lending officers from the banks that rejected him patronize Youngstown Sports Grille. He takes delight in serving them lunch.